Solution: Under perpetual inventory system:
Ending inventory under FIFO = 10×$30 + 15×$20 = $600
Ending inventory under LIFO = 10*$10 + 5*$20 + 10*$30 = $500
computed as follows:
Reasoning :
Under FIFO method, ending inventory contains units at very latest purchase price on the assumption that earlier purchased units are sold earlier so, latest purchased units remained in the stock.
While in LIFO method, ending inventory contains units at very oldest purchase price on the assumption that latest purchased units are sold earlier resulting the oldest purchased units to be remained in the stock.
Addison, Inc. uses a perpetual inventory system. The following is information about inventory for the month...
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